SanDisk just told Wall Street it has turned commodity flash memory into a four-year, $93.9 billion contract business, and investors sent the stock up 14% on the news.
At its Investor Day on August 13, SanDisk revealed that eight customers have signed what it calls New Business Model agreements, locking in roughly half of its expected fiscal 2027 NAND bit output and two-thirds of fiscal 2028 output under contracts averaging more than four years. Those deals come with $16.5 billion in enforceable financial guarantees, meaning if a customer walks away, the money still flows to SanDisk without a lawsuit. CFO Luis Visoso told investors the mechanism is deliberately simple. No lawsuits. No discussions. Just a set procedure triggered at signing.
The numbers tell the real story. SanDisk's fiscal fourth quarter revenue hit $8.97 billion, up 372% from a year earlier, with GAAP net income of $6.9 billion and gross margin at a record 84.6%. For the full fiscal year, revenue reached $20.25 billion, up 175%, with net income of $11.43 billion. This is a company that sold cheap flash chips into phones and USB drives a few years ago.
Now it's pricing like a chipmaker with pricing power.
Three of those NBM contracts, signed in the third fiscal quarter, alone carry a minimum revenue backlog near $42 billion, backed by more than $11 billion in enforceable guarantees, according to details CFO Visoso shared with JPMorgan analysts and later confirmed at the Investor Day. Across all eight agreements, SanDisk says total expected revenue comes to a minimum of $93.9 billion assuming floor pricing, with $91.1 billion of that still to be recognized. The contracts use what management calls a floor-and-ceiling structure: near-term prices are largely fixed, while pricing in the outer years carries variable components that let both SanDisk and its customers share in future price swings.
Kioxia Sells Out Its Entire 2026 NAND Flash Supply Just as AI Chips Ship Kioxia has begun shipping samples of its 10th-generation BiCS FLASH 1Tb NAND dies for AI data centers, even as it confirms its entire 2026 production is already sold out. The chipmaker is now racing Samsung, SK Hynix and Micron to expand capacity while AI-driven demand keeps memory prices climbing.
That's a deliberate break from how NAND has always been sold. Flash memory has historically been a brutal commodity business, with prices swinging wildly on quarter-to-quarter supply and demand. Not anymore, SanDisk says. CEO David Goeckeler said future output growth will come mostly from nodal transitions rather than building new wafer capacity. That's how SanDisk expects to hit mid-to-high teens revenue growth through 2030, without a major capital spending cycle.
Wall Street Hasn't Fully Bought In #
Management's guidance for fiscal 2028 through 2030 calls for non-GAAP gross margins near 80%, operating margins near 75%, and free cash flow at roughly 50% of revenue. Those are Nvidia-style numbers for a business that, as recently as 2023, was bleeding cash as NAND prices collapsed. That's some turnaround.
The stock jumped on the announcement, but it's still trading more than 50% below its 52-week high of $2,354.39. At current levels, SanDisk trades around 7 times estimated fiscal 2027 earnings. That multiple suggests investors are still betting the memory cycle turns down again before 2028 arrives. That skepticism isn't crazy. It's happened before. NAND has burned investors before, and SanDisk's own history includes years of thin or negative margins when supply outran demand.
What's different this time, according to SanDisk? The AI buildout has made memory scarce enough that hyperscalers are willing to sign away years of pricing flexibility just to guarantee supply. Whether that holds through an entire down cycle is the question the market hasn't answered yet. For now, SanDisk has the contracts, the guarantees, and the margins to make its case. The next test comes whenever NAND demand cools and those floor prices get tested for real.
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